The world is changing so fast that taking one’s eyes off the ball could be a blinder. It has gone almost unnoticed that this year China will surpass the United States in overall economic size measured by the purchasing power parity (PPP) method. Michael Forsythe and Neil Gough of the New York Times extrapolate from World Bank figures of 2011 to the present and conclude that China “is on track to overtake the United States this year as the world’s biggest economy, years sooner than many economists had previously forecast.” The same economic data set reveals that India is now “the world’s third largest economy, moving ahead of Japan.”
While academicians debate the accuracy and appropriateness of the PPP method vis-Ã -vis the nominal method of calculating gross domestic product (GDP), the reality is that America can no longer sustain itself as the number one economy. This change of guard has huge implications for global order.
The American scholar Joseph Nye argued in 2010 that “economic power has been multipolar for more than a decade, with the United States, Europe, Japan and China as the major players and others gaining in importance.” The latest advent of India into the top league and the further shuffling of the deck among major players, wherein the US is ceding the leading spot to China, signify that a new era has dawned.
The former have-nots who were colonised and whose historic clocks were deliberately frozen for three centuries are now reclaiming their lead roles.
The “American century”, which Henry Luce equated to the 20th century in Life magazine’s 1941 edition on grounds that the United States was “the most powerful and the most vital nation in the world”, is now passé.
To be sure, the US still retains unrivalled supremacy in relative military strength, with China and the rest lagging behind at a safe distance. Nye reminds us that “military power is largely unipolar, and the United States is likely to retain primacy for quite some time.” America’s comparative fall in global power standings is limited to economic indicators. But given the conversion mechanism between economic and military capabilities, we can imagine the US conceding even military leadership of the world within our lifetimes.
When GDP stagnates and the economy gets into a long funk, as has been the case with the US since 2008, allocating massive sums to defence and continuing expan-sionist military policies worldwide are no longer easy options. The high government debt-to-GDP ratio in America of over 100 per cent and the attendant across-the-board budget cuts have created a new long-term trajectory of military downsizing, whose effects in battle and armed power projection will be evident in a decade from now.
As if taking a bow to this less rosy future for the American military, US President Barack Obama delivered a major speech at the United States Military Academy at West Point last week rebutting the conservative belief “that every problem has a military solution.”
He is signalling and preparing the American public and intelligentsia for a new sobered age when the US would not have the means to use gunboats, fighter jets and boots on the ground with the same gung-ho self-assuredness that marked Luce’s “American century”. The cowboy has realised that he is running out of ammo. In light of the economic displacement of the United States by China and its potential drag-down effect on the American military, what kind of new forces will be able to take the lead in ordering the world? Mr Obama’s rhetorical flourish at West Point contended that “America must always lead on the world stage. If we don’t, no one else will.”